Advanced Metering Infrastructure (AMI) Evaluation Final Report

Author:

Black & Veatch

Year:

2011

Abstract:

This report describes an evaluation performed by Black & Veatch of an Advanced Metering Infrastructure (AMI) implementation throughout the Commonwealth Edison (ComEd) service territory. In conducting this evaluation, Black & Veatch worked closely with the ComEd AMI project team and business managers over a five-month period (January 2011 – May 2011) to refine the scope of the AMI investment, gather AMI Pilot results, develop operational data and projections, identify and resolve key business case formation questions, and construct an independent view of the AMI business case.

The overall results of the evaluation are positive. On the cost side, ComEd will incur new costs for AMI meters, the wireless or Radio Frequency (RF) communications network, IT systems, implementation services, and on-going operational expenses. Over the 20-year evaluation period, assuming a five-year meter deployment scenario, ComEd would expect to invest $996 million in new capital and incur $665 million of operational costs to run the system.

Cumulative benefits over the 20-year evaluation period, however, significantly exceed cumulative costs by a factor of almost three. Benefits result from improved operational efficiencies ($1,625 million), reduced power purchase costs ($707 million), reduction in bad debt expenses ($791 million), new energy revenues ($1,051 million), and new delivery service revenues ($564 million). A large majority of these benefits are driven by reductions in theft and tamper conditions and reductions in consumption on inactive accounts.

Taking account of all costs and benefits, and assuming adjustments to customer rates, the Net Present Value (NPV) is $1,296 million over the 20-year evaluation term. This is the value of the AMI program to the ComEd customer.